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EarlySalary, an app to avail short-term loans through smartphones


Akshay Mehrotra's visiting card says: Hello, I'm Akshay. Need cash?

"This is what we do, so we might as well put it on our cards," says the CEO of EarlySalary, a Pune-based startup that allows individuals to avail short-term loans of up to Rs 1 lakh in minutespll1! through their smartphones.

To avail of a short-term personal loan, one needs to log on to the EarlySalary app through their social media account of say, Facebook or LinkedIn, answer a few questions about themselves, and upload their PAN number and bank statements. Within ten minutes, the credit is underwritten digitally, said Mehrotra who launched EarlySalary along with Ashish Goyal and Jay Jain.

With PAN and bank account details, the company would be able to access a person's credit history, which would help it determine whether to lend or not and fix one's credit limit.

The NBFC startup raised $1.5 million, or about Rs 10 crore, in November last year from Ashok Agarwal of Transcorp Group, and it will use this corpus to give out loans of between Rs 10,000 and Rs 1,00,000 for a period of seven to 30 days, with prepay options, at interest rate of 24-30 per cent, lower than most credit card rates.

"Over time will look at whether we need to raise more funds," Mehrotra said.

EarlySalary targets youngsters in the 22-30 age group, who are in their first job and need small loans closer to the end of the month to see them through till the next payday.

"The short-term lending model is something that has worked well in the UK and has helped create a completely new market within lending," said Devie Mohan, a fintech strategist in the UK. "Even in India, there is a high gap between traditional lending and payday lending, and a service that strikes the balance between ease of obtaining the loan versus cost of payment," she said.

So, how would EarlySalary ensure most its borrowers return the money? Mehrotra said social media will play an important part in determining who the loans will be disbursed to. If someone has defaulted on a loan payment, then chances are that Facebook 'friends' of that person might not find it easy to get a loan approval, he said.

EarlySalary plans to start its lending operations in Pune and then expand 

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